LOOK AT IT THIS WAY
Have you ever experienced extreme turbulence on a long flight? It’s frightening, isn’t it? The sudden drops are unpredictable and disconcerting. You can feel as if you are going to die. It’s how a lot of investors felt during the recent period of market turbulence.
Talk to a professional pilot, and you’ll be told that experiencing a few bumps from time to time are part and parcel of flying. Turbulence is due to sudden changes in air flow due to a range of influences such as wind speed, storm activity and the underlying landscape.
Pilots are well-trained to deal with this phenomenon. New technology on planes gives pilots sophisticated tools for navigating their way around rough spots. And plane bodies are engineered better than ever to deal with chaotic air movements.
But no system is perfect and there inevitably will be periods when you just have to grin and bear it. And that’s why cabin crew always recommend that while you’re in your seat, even after take-off, that you keep your seat belt fastened at all times.
Like your friendly airline pilot, a financial adviser has lots of tools for helping you deal with the difficult air pockets that come along in financial markets from time to time. For instance, they can build you a portfolio that is made to withstand much of the volatility.
While no-one can forecast what markets will do day-to-day, a good adviser can help you navigate the best route to your destination. And, of course, he’ll recommend you stay diversified and rebalance occasionally to ensure you’re not taking any more risk than is necessary.
Like your in-flight captain, your adviser can also provide a measure of reassurance during the rocky times. Dealing with the occasional periods of rough weather is part of the experience, and they have the tools at their disposal to keep you on course throughout the market turbulence.
Now, buckle up and enjoy the flight!
With our Look At It This Way series, we use visual metaphors to help demystify investing and personal finance. If you’ve found this metaphor helpful, you may want to try these: